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Preference Evolution, Two-Speed Dynamics, and Rapid Social Change

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Author Info
William H. Sandholm (Department of Economics, University of Wisconsin, Madison)
Abstract

We present a dynamic analysis of the evolution of preferences in a strategic environment. In our model, each player's behavior depends upon both the game's payoffs and his idiosyncratic biases, but only the game's payoffs determine his evolutionary success. Dynamics run at two speeds at once: while natural selection slowly reshapes the distribution of preferences, players quickly learn to behave as their preferences dictate. We establish the existence and uniqueness of the paired trajectories of society's preferences and aggregate behavior. While aggregate behavior adjusts smoothly in equilibration games, in coordination games aggregate behavior can jump discretely in an instant of evolutionary time. (Copyright: Elsevier)

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File URL: http://dx.doi.org/10.1006/redy.2001.0128
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Publisher Info
Article provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.

Volume (Year): 4 (2001)
Issue (Month): 3 (July)
Pages: 637-679
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Handle: RePEc:red:issued:v:4:y:2001:i:3:p:637-679

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Related research
Keywords: evolutionary game theory; evolution of preferences; coordination games;

Find related papers by JEL classification:
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Dekel, Eddie & Scotchmer, Suzanne, 1999. "On the Evolution of Attitudes towards Risk in Winner-Take-All Games," Journal of Economic Theory, Elsevier, vol. 87(1), pages 125-143, July. [Downloadable!] (restricted)
    Other versions:
  2. Jeffrey C. Ely & Okan Yilankaya, 1997. "Nash Equilibrium and the Evolution of Preferences," Discussion Papers 1191, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
    Other versions:
  3. Robson, Arthur J., 1996. "The Evolution of Attitudes to Risk: Lottery Tickets and Relative Wealth," Games and Economic Behavior, Elsevier, vol. 14(2), pages 190-207, June. [Downloadable!] (restricted)
  4. Steffen Huck & Georg Kirchsteiger & Joerg Oechssler, 1997. "Learning to Like What You Have - Explaining the Endowment Effect," Game Theory and Information 9702001, EconWPA, revised 15 May 1997. [Downloadable!]
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  5. Jorgen W. Weibull, 1997. "Evolutionary Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262731215.
  6. Karni, Edi & Schmeidler, David, 1986. "Self-preservation as a foundation of rational behavior under risk," Journal of Economic Behavior & Organization, Elsevier, vol. 7(1), pages 71-81, March. [Downloadable!] (restricted)
  7. Huck, Steffen & Oechssler, Jorg, 1999. "The Indirect Evolutionary Approach to Explaining Fair Allocations," Games and Economic Behavior, Elsevier, vol. 28(1), pages 13-24, July. [Downloadable!] (restricted)
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  8. Dekel, Eddie & Ely, Jeffrey & Yilankaya, Okan, 2004. "Evolution of Preferences," Micro Theory Working Papers dekel-04-08-13-01-21-07, Microeconomics.ca Website, revised 09 Jun 2006. [Downloadable!]
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  9. Robson, Arthur J., 1996. "A Biological Basis for Expected and Non-expected Utility," Journal of Economic Theory, Elsevier, vol. 68(2), pages 397-424, February. [Downloadable!] (restricted)
  10. Samuel Bowles, 1998. "Endogenous Preferences: The Cultural Consequences of Markets and Other Economic Institutions," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 75-111, March. [Downloadable!] (restricted)
  11. Guth, Werner, 1995. "An Evolutionary Approach to Explaining Cooperative Behavior by Reciprocal Incentives," International Journal of Game Theory, Springer, vol. 24(4), pages 323-44.
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Possajennikov, Alex, 2002. "Two-Speed Evolution of Strategies and Preferences in Symmetric Games," Sonderforschungsbereich 504 Publications 02-03, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim. [Downloadable!]
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  2. repec:att:wimass:1920220 is not listed on IDEAS
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